Have you experienced any of these characteristics with a coworker or a boss?

The need to be “right” all the time

Quick to take credit for everything but be the first to assign blame on others

Minimize people and their emotions

Pit employees against each other

Desire to be appreciated and attended to all the time

Show no consideration for others or display empathy or compassion

Inconsistent behavior – you may be their best colleague/employee one minute and they may be threatening to fire you the next

Insistence on compliance with their demands regardless of how unreasonable they might be

Complete disregard of ethics, standards and morals, like they are above the law

If any or all these behaviors seem familiar to you, then run as far as you can from this individual, especially if they are your boss! Since that may not always be an option, below are some strategies that will help you deal with narcissists.

Make them look good. Praise and acknowledgement make them tick

Give them the attention they need, within reason. They feel threatened when you do not comply with their own self worth and aggrandization

Do not try to reason or argue with them, it will just aggravate them. Let them talk while you listen

Learn their pet peeves and avoid those. Similarly, learn what is important to them and cater to that

Build a wall – you cannot take anything these individuals say personally. They can be manipulative and abusive, damaging your self-esteem. Disengage with them

Find your drivers – do not expect them to motivate you and do not let them take you down. Keep the fire burning by focusing on what’s important for you

Be proactive. While this is a good management mantra all the time, learn the triggers to narcissistic behaviors and control their occurrence as much as you can

Enhance your emotional intelligence and learn tactics to cope with the behaviors professionally

Let them micromanage or make decisions. They want their way and will get it. If you don’t agree with it voice your concerns but don’t expect to have the final say

Narcissists may be very successful entrepreneurs or professionals owing to their ability to turn on the charm and risk-taking skills, but they make ineffective leaders. Learning how to cope with narcissists in the workplace can be a great lesson in managing up or around!

I am sure you have heard the old adage “the definition of insanity is to keep doing the same thing over and over again expecting a different result.” I would like to expand to that definition “and doing something without appropriate planning and expecting a better outcome.” Have you ever witnessed an unexpected result or outcome followed by a flurry of activity which is expected to positively impact the outcome? The danger of this reactionary activity is the false sense that the problem is being solved. Reactionary activity may address the fringe of the problem, but the root cause remains festering and aggravating the organization. To help with the risk of confusing activity with root cause problem solving, I suggest the Four Steps to Achievement, or what I like to call P8. Read the Full Article

2012 Womens Olympic Triathlon finish in London - After two hours of racing with the best in the world, what would one or two seconds in transition time have meant for the top three athletes?

Transformation in healthcare is personal: it requires the transformation of health system leaders. This LTS begins to speak to key differences in some of the fundamentals of transformational vs traditional leadership in healthcare.

This article focuses on how the nature of our work is changing.

Many compare the healthcare transformation journey to one of our oldest Olympic sports: “It’s a marathon!” Although this might reflect the persistence, resilience and endurance sentiment, I offer an analogy upgrade from one of our newest Olympic sports: “It’s a triathlon!”

Why?

First, transformation requires mastery of multiple disciplines. We – and our organizations - may have competency in one or two disciplines, but adaptive learning is required to develop and integrate the different and stronger skills needed for next level or breakthrough performance. We cannot count on simply doing more of the same ‘one foot in front of the other’ plodding and grinding to advance our mission – our people are burning out. Unlike in the run or bike, the first triathlon discipline – the swim - does not ask as much of the legs. While the upper body provides most of the forward propulsion, for swim speed it is more important to reduce drag. Drag is not a material factor in running, but it is in running our organizations – and barnacles, barriers and anchors come in many, mostly self-inflicted, forms.( Read Full Article)

Over the years, I’ve heard many stories, inspirational stories on leadership, one of my favorites involves President John F. Kennedy and his first visit to NASA in 1962. As the story goes, the President was touring the facility when he came across a janitor carrying a broom down the same hallway as the touring President. Kennedy, a great lover of people stopped him and asked him what he did for NASA, not missing a beat he replied, “I’m helping to put a man on the moon”.

As I reflect on this, I’m struck by the absolute simplicity of this statement, but also the way it speaks volumes. This individual clearly understood that he was an integral part of the team, no matter what the role. If he did his job well, he contributed to the overall success of the team, engineer, scientist, astronauts etc. His job, although different in almost every way imaginable from his colleagues, still contributed to achieving the overall goal, that of putting a man on the moon. Read Full Article

As healthcare (including acute care, nursing homes, home health and all downstream providers) moves towards a greater focus on patient/family satisfaction, the model of healthcare must also evolve, for both the government and patients/families will be closely reviewing these in determining healthcare provider(s) of choice. A satisfied patient is a more compliant patient, making for a more engaged patient. Providers at every level must now move beyond the patient centered approach, into an understanding of the patient/family perspective and be willing and able to convert input to action and measurable goals, benefiting staff, patients and families. Read Full Article

Veterans Day reminds me of my father. In WWII, he landed on Omaha Beach on D-Day.

As Steven Ambrose details in his book “D-Day,” the Allies planned the Normandy invasion for three years, but as soon as our troops hit the beaches, the plans went out the window. To the ‘man on the ground,’ NOTHING was as planned. And on the beaches, formal leaders were dead or not available. Survival and progress to save the free world depended on rapid learning and action, i.e., adaptive leadership. Our troops felt empowered to act, German forces felt compelled to wait for Hitler’s direction. The rest of this leadership story, as they say, is history.

Despite asserting to my Dad, in my youth, the growing impact of technology, e.g., pilotless planes, long-range capabilities, etc., he remained convicted of the mantra “the ultimate weapon is the man on the ground.”* My Dad and his colleagues, some of whom made it past D-Day, are heroes. I have since learned that there were others “on the ground” back in the U.S. who heroically enabled these heroes. During the planning for the largest invasion in modern history, a significant challenge was figuring out how to get our troops from ‘ship-to-shore.’ The U.S. federal government knew how make large ships to get our troops across the English Channel, but they could not get our troops to the shore. Enter Andrew Jackson Higgins, who was described by Dwight D. Eisenhower in 1964 as “the man who won the war for us.” (Read Full Article)

Healthcare has been in a tremendous period of change, mergers, acquisitions, leadership restructures, and new and improved strategic plans and priorities fill the time of most leaders. During this time of change, many leaders may wonder privately, does the mission of this organization still matter? Or is it only about the bottom line?.

When looking at high performing companies outside of healthcare, they all share some things in common, first, they have a clear and well spelled out purpose/mission. This is important so everyone, front line staff to executives can understand the why we are here, and how we will define success. This is not just a feel-good statement, and properly developed and executed this has the potential to pull people forward, especially during uncertain or difficult times. Read Full Article

In healthcare, how often have you heard this, he/she is a great clinician, but has no personality. Or, take me to hospital A, but if I’m really sick take me to hospital B, this assumes hospital A is the “Nice” hospital but Hospital B is where all the best clinicians work. So, the obvious question is, can’t you have both? Yes, if you select the right people.

In Jim Collins book, “From Good to Great”, he writes, “People are your most important asset,” or rather the right people are. In today’s healthcare market many organizations are making the move from Volume to Value, with Quality being a primary focus, but how do our patients define quality? Sure, having the best possible outcome is right up there, with no medical mistakes or errors please. However, most patients come to our organizations assuming great quality, and value the interaction with their caregivers as high if not higher than any other part of the patient/caregiver interaction. Read Full Article

Task oriented leaders, those using just workplans, measurements, goals, dashboards, etc.… sometimes may be left scratching their heads when their teams do not accomplish their goals, or performance begins to decline without any clear reason as to why.

To motivate your teams, and accomplish your goals, perhaps you would be better served to examine your leadership relationship competencies.

WHAT IS RELATIONSHIP LEADING?

WHAT IS TASK-ORIENTED LEADING?

When determining what leadership style works best for your team, consider the make-up of the team, today’s workforce is motivated much more by team achievement but still values individual recognition. Workers today want to achieve the goal, but want much more flexibility than past generations when it comes to how to achieve that goal. Read Full Article

In all the hustle and bustle of the holiday season, it’s easy to forget that in just a few weeks most of us will be looking at the New Year and a list of resolutions or promises that we have made to ourselves that we hope to accomplish. Some of our old favorites are bound to make the list, lose some weight, exercise, give more to charity, get back in touch with family or old friends.

But what about including in this year’s list the commitment to be a better leader next year?

Research tells us that when we write our goals down, we are far more likely to achieve them, so begin the year by taking a good hard look at what is means to be a leader, remember, you may have the title but being the leader of people requires these fundamental building blocks, can you complete these? Read Full Article

A physician who I greatly admire and respect once took a job as a hospitalist in a small town. She was told that she would have a guaranteed salary. But she did not read the fine print in her employment contract. The guarantee was actually an advance against future production, or collections. She was required to meet a certain level of collections to support her salary. If she did not meet that level of collections, she had to pay back the deficit. There was a hospitalist outside of and competing with her group. One of the emergency department physicians really liked this hospitalist. If he determined that the patient had good insurance, he called the outside hospitalist to do the admission. If he determined that the patient did not have good insurance, he called my friend’s hospitalist group. They were providing a tremendous amount of care to the patients in the hospital. They were just not getting paid. The longer she worked there, the deeper in debt she was getting. One of her partners did the math and simply left. My friend stayed out of a sense of integrity and fairness to give them time to find her replacement. She was not repaid in kind. And who was going to come and take over for such a terrible deal? She ended up in court and had to pay everything that the hospital was demanding of her. The judge said that it was a terrible contract, but a legally binding one and that she was a big girl and should have read the contract. Her partner who left early made the right decision in that she paid much less to the hospital.

When I was in medical school, we had a medical legal course which consisted of about 10 hours of lectures. One of the things that we were told was to read very carefully anything that we put our signature to. We were particularly cautioned to read employment contracts. I have followed this advice, and it has served me very well. I know of some stories where physicians were badly injured for not having read their employment contracts.

The first question is, “Will I be paid as an employee or as a contractor?” If an employee, then the employer pays half of the Social Security and Medicare taxes. If a contractor, then you pay all of the Social Security and Medicare taxes. If paid a salary, you will get a set amount of money, usually every two weeks or every month. Most people who are paid a salary are expected to work significantly more than 40 hours per week, because there is no additional cost to the employer for extra hours that you work. Many job offers will sound like salaried positions, but close examination of the contract will reveal that all or a significant portion of the payment offered is contingent upon one or more performance metrics. These metrics may include collections, relative value units (RVU’s), quality & efficiency. These may be based on individual performance, group performance or some combination of both. Collections is how much was actually paid for the care you delivered. Usually, a percentage of your collections is paid to the group or hospital for overhead. RVU payment is based not on collections, but on billing. This system is often used by organizations that serve the underserved as it encourages physicians to deliver care regardless of an individual’s ability to pay. Increasingly large portions of physicians’ compensation packages are only paid if the individual and/or group meet certain quality and efficiency metrics. Whether you are actually in control of a metric, the manner in which the metric is tracked & calculated and the thresholds to qualify for the metric all can have significant impact on your actual compensation. Benefit packages can also have significant impact.

In such a short article, I cannot tell you everything to look for. I would advise you to look closely at the exit clauses. When you go to work for a new employer, you have great hopes and even expectations that things are going to go very well. But they may not. I heard of a physician who, within two months of joining a new group, learned that his partners were engaged in and engaging him in activity of questionable legality. The exit clauses in his contract were onerous, and it was very costly for him to leave so early. Issues that may hit you with early separation can include repayment of sign-on bonuses, repayment of moving stipends and noncompete clauses. I was once invited to sign a contract that said I could not work for two years in any hospital anywhere in the United States owned by any company or organization that had a contract with this large physician staffing company (which had hospital contracts in many states).

So how do you go about reading an employment contract? Of course, you are not going to receive a copy of the contract until after you have been given an offer of employment. The contract is usually sent as a PDF. You can either print it out and use a highlighter and an ink pen or, if you can get it into an editable format on your computer, you can go through the document using track changes. You are now going to sit down and read every single word of the document: slowly, carefully and thoughtfully. You will go online and look up the definitions of any legal terms that you do not understand. You can write those definitions in the margins. You can make notes about things that you understand and want addressed and about things that you do not understand. After fully digesting the document, you will either decide to walk away from this job or you will think that this might be doable if the potential employer is agreeable to reasonable changes.

If you wish to go forward, you will now hire an experienced physician employment attorney and will send him or her a copy of your highlighted document with all its notations. You will discuss your concerns. Your attorney will review your document and schedule a follow-up discussion. Your attorney may advise you simply to walk away. Or he may give you a list of items that need clarification or correction. Some issues you identify and some of your attorney’s recommendations will be deal breakers meaning either these changes are made, or you refuse the offer of employment. Others may be that it would be nice if you could get them, but are not that important. With the help of your attorney and your spouse or significant other, if there is one, you will formulate a plan for seeking necessary and desired changes in your employment contract that are reasonable and fair to both parties. Your attorney will help you express your concerns in a language that resonates with the attorney working for your potential employer who will have to give the final approval on any changes to the employment contract.

I will walk you through how I approach these negotiations. I schedule a phone meeting with the individual designated by the potential employer to be their face for the negotiations. My tone is very pleasant and reasonable. I start by saying that my wife and I have carefully read the contract. I have sought the advice of a very competent attorney experienced in physician employment contracts. From these discussions, the following concerns have arisen. If the concern is coming from me, I do not hesitate to say so, but I consider it a good strategy to point out when the concern is coming from my wife or from the advice of my attorney. This is called an appeal to higher authority. It may seem like weakness, but it is a very powerful tool. Used properly, it can tremendously strengthen your position as nothing they say to persuade me will have any impact on how my wife feels about it, especially when it is an issue that is recognized as a reasonable concern for the employee’s wife. When appropriate, I ask for clarification of language in the contract rather than outright changes. Everything that I am asking for needs to be laid out in this first meeting. If you keep coming back with new demands, they may tire very quickly and look for another candidate.

You likely will not get everything you ask for. Just make sure that you get everything you need.

You likely will not get everything you ask for. Just make sure that you get everything you need.

Early in my career my father shared with me the following advice: “Leave your emotions at home. Do not take your emotions to work.” He was not talking about positive emotions. He was talking about the negative emotions that get so many of us in trouble at work. Chiefly he was talking about anger.

Many people believe that anger is like a boiling, caustic liquid inside of them that can be purged by expressing the anger. They think that they can blow up and “get it out of their system.” But that is not how anger works at all. Anger is like a muscle. The more we express our anger, the stronger it becomes.

Solomon is revered as an extremely wise king. Here is what he had to say about anger. “The discretion of a man defereth his anger; and it is his glory to pass over a transgression.” * “A soft answer turns away wrath: but grievous words stir up anger.” ** “He that is slow to anger is better than the mighty; and he that ruleth his spirit than he that taketh a city.” ***

Ambrose Bierce said, “Speak when you are angry and you will make the best speech you will ever regret.” The regret can be for the harm we have done to others and the harm we have done to ourselves. Anger can do great harm to very important relationships. Sometimes we are able to completely restore the relationship. Sometimes we can only patch it. Sometimes we are left with an irreparable breach. Regardless, our efforts at mitigation may require the expenditure of great effort and political capital.

Our anger can decrease our allies and increase our workplace foes. Whether at work or not, we can never have too many friends and even one enemy is a luxury that we can ill afford. In a large and complex work environment, we may find that we cannot always give everyone everything they want. People may choose to be our enemy in spite of our best efforts. It would be foolish indeed to recruit additional enemies with unbridled, unregulated anger.

On the subject of enemies, I will say that over the years I have had a few people who have chosen to be my enemy. I have never accepted their invitation to join the conflict. When I speak of enemies, I speak of those who bear me ill will, but I am determined to be a friend to all, even those who are my most implacable enemies. I may distance myself from them and take steps to prevent them from injuring me further, but I will not move to injure them out of spite or revenge. It has been said that the best way to destroy an enemy is to turn him into a friend.

Often our anger prompts us to tell people what we think. We would be most foolish to reveal our innermost thoughts to people who are truly our enemies. They have no right to know what we think. Stephen Covey said, “Seek first to understand and then to be understood.” Often our anger is prompted by a distortion in our perception rather than an unacceptable reality. Once we began working off the script of our perception, the victim of our anger will often perceive the barrage as a personal attack, whether it is one or is an attempt to resolve a problem. It is a natural, although often not helpful, response to respond in kind in defense.

Conflict is good. Contention is bad. We do need to resolve conflicts. We do not need to do so in a contentious way that disrupts our organization. I highly recommend the book, Crucial Conversations, for learning how to resolve conflict without contention. This book is so jampacked with valuable knowledge that it should be read, reread and studied to fully master its principles. It has the potential to transform our careers and our personal lives.

Conflict is good. Contention is bad. We do need to resolve conflicts. We do not need to do so in a contentious way that disrupts our organization. I highly recommend the book, Crucial Conversations, for learning how to resolve conflict without contention. This book is so jampacked with valuable knowledge that it should be read, reread and studied to fully master its principles. It has the potential to transform our careers and our personal lives.

Ensure accurate coding and billing by reviewing the coding and compliance policies woven into a health system’s revenue cycle.

Because coding can be confusing and laborious it can often be overlooked and potentially not recognized as part of the revenue cycle process. Now more than ever before, coding reviews are an important component of a health system’s overall "value”-based payment continuum, due to continued scrutiny by Medicare/Medicaid and commercial payers. Health system executives are tasked with optimizing performance of and maximizing efficiency of the coding stage in the revenue cycle. Accurate coding leads to clean claims, which results in prompt reimbursement, and that’s why coding has a direct impact on the bottom line.

Coding is a moving target for many providers. Omnipresent and at times inconvenient and confusing, the ever-changing demands coupled with the risk of inaccuracy constantly challenges providers. With severity of care levels and clinical outcomes increasingly tied to “value,” reimbursements will inextricably link with accurate disease-state coding and documentation. Also, with provider compensation woven tightly to provider production (with emerging compensation models embracing quality and efficiency components, as well), accurate coding confirms both proper reimbursement to the system and accurate compensation for those providers on productivity models.

Educating providers mitigates downside risk to health systems and hospitals and offers leadership (the C-suite along with the physician executive team) the prophylactic of ongoing monitoring ensuring that the administrative/physician partnerships are cemented in a compliant manner.

Coding Compliance

A successful coding review and compliance plan should be crafted to define the hospital or health system’s investment and belief in coding compliance. A memorialization of the processes and procedures undertaken in a coding review enshrines that all constituents clearly understand the goals, objectives, and expectations of the hospital/system. Coding/compliance plans cannot be one-dimensional relying solely on documentation of services or an information technology solution. For instance, in a vacuum a provider can “pass” a coding assessment with proper documentation which generates work relative value units (wRVU). However, sometimes that productivity can be overly, and erroneously, robust given clinic hours, patient facing time, provider schedules, etc. Since most employed providers have a component of their compensation driven, at least in part, from a wRVU model, ensuring precise claim level of billing (e.g. a level 3 versus a level 5) offers physicians and health system leadership peace in the knowledge that claims, charges, and subsequent revenue are accurate.

Additionally, until block chain, “machine learning,” and other IT initiatives like artificial intelligence (AI) have firmly taken hold to “solve” coding and compliance issues, human-intervention will be required to certify that coding documentation aligns with patient facing time, required coding elements, and charting. EHRs can be dangerous when a user simply hap-hazardly “carries forward” a note which can offer a false sense of accuracy. Providers (physicians and APPs) must fully understand the rules and regulations of coding, especially in the critical nature of pay for value initiatives that are evolving over time. Additionally, and tangentially, carrying notes forward has potential med/mal exposure. All of that said, accurate coding is essential relative to severity of disease state, etc.

A Coding and Compliance Program - The "3 F's"

Frequency

Delineate a program of ongoing review and analysis. It should have well-defined expectations. The program should be structured with defined timelines, be diligent, and guarantee random sampling and a rotating sequence of providers (depending on group size) for review. In program development “acceptable” parameters should be constructed indicating varying rates of post-review monitoring and education. The program should be “owned” by a staff member (with backup) to ensure it is perpetual and robust.

Feedback

After reviews are performed, an expedient and concise feedback loop should be deployed displaying to providers deficiencies and providing education. For instance, if a provider “fails” 80% of his or her coding reviews for accuracy, he or she should be placed on a more frequent review process (every quarter?) as defined in the compliance plan to document a remediation process and catalogue improvement in accuracy.

The feedback loop should contain educational opportunities that celebrate successes and elucidate challenges. Providers should be counseled and offered “real time” assistance if coding issues or questions arise during the day.

Follow-up

The coding review should carry with it a robust follow-up plan ensuring that team members (from front desk to providers) understand that the plan is deployed and in force infusing into the culture a sense that the system or hospital takes, and will continue to take, coding compliance seriously. That is not to say that staff members should know that Dr. X failed his or her coding review. Instead, the message to staff should be that the system views coding compliance as a system-wide obligation and focus.

Stout’s coding/compliance leadership ties coding together with one point of contact to manage all aspects of review and education. Our seamless coding and compliance team delivers a variety of solutions based on client need. Stout associates manage outpatient, “pro fee” evaluation and management (E&M) and risk adjusted coding assessments and education, while deftly handling Ambulatory Payment Classification (APC), Diagnosis Resource Group (DRG), and Clinical Documentation Improvement (CDI) coding initiatives for inpatient coding. Additionally, we are adept at hospice and home care coding analyses. Our “borderless” approach empowers our team to rapidly address client needs by removing artificial “silos” that inhibit fluidity on multi-faceted projects running between health system, inpatient work and ambulatory reviews. Stout associates understand the congruency of in and outpatient facilities and can deliver reviews and offer a coding/compliance partner.

* To read more about Stout’s experience and how we provided a 15 to 1 return on a client’s initial investment by helping them improve on their revenuecycle, download our case study now.

It is vital to anticipate how revenue cycle reports will be viewed across the organization.

If you are a hospital or health system with disengaged physicians, you are missing the boat (and probably bumping along, operationally and financially). Sound physician executive leadership empowers health systems to deploy curative operational solutions, offers providers input and a stake, and engages the physicians as valued partners versus cogs in the machine.

We recently performed a health system operational turnaround where the system was significantly subsidizing their employed physician network (e.g. losing money per physician). An undergirding issue (among many) was the lack of physician input into the organization. This reality left physicians fragmented, unappreciated, and undervalued. While there existed no discernable ill-will or animus, the physicians simply were not engaged nor asked to provide their input and insight. This chasm lent to chaotic differentiation from clinic to clinic amongst the system’s 16 clinic locations.

As a component of the overall structural rebuild we were engaged to perform, an immediate need was the creation of a physician advisory committee (PAC). As will be discussed, the implementation of a PAC had a direct impact on the health system’s revenue cycle. Within one year, system subsidies were reduced by 75% helping the system claw back toward profitability.

Setting the Table

In the instant situation, the health system was hemorrhaging cash. An operational assessment was performed on each clinic site. As part of the post-assessment implementation and rebuild, a PAC was created. Our team suggested that, out of the gate (and at least as a Band Aid) the system define and immediately select, even if temporarily, physicians who exhibited tendencies toward engagement. The key was identifying physicians engaged in affecting change but who, to this point, had not been asked to. (While building the PAC quickly is not ideal, this build drove the hospital system to immediately draw from the talented physicians who sought to make a difference).

Standards, rules, and measures were delineated vis-à-vis tenure, mission, duties, etc. Each physician on the committee was known to be an “invested” partner who, to this point, had had no voice.

In the newly born committee, the physicians:

provided an avenue for physician input and enhanced bi-directional communication

provided a litmus for possible changes (e.g. comp plan redesign)

created quality initiatives

offered peer review and guidance

offered emotional buy-in and intellectual contributions

became valued partners

established key operational standards throughout the physician network

advised/consented on issues (the executive office maintained the final say)

had meetings that were agenda driven, and

assisted with electronic health record (EHR) optimization

While many of these items can be tackled by the C-suite, the reality is that most folks in the administrative offices don’t practice medicine and it is certainly easier to hear a message from a peer who lives the life you lead versus one who has not walked in your shoes.

Whether a network is large or small, some form of physician committee is advised and models are malleable and scalable; there is no one right answer. Two rudimentary (and simple) examples follow.

Figure 1: Small Health System

In a small system, as with the client referenced earlier (75 physicians), the PAC should have a limited number of participants (prorata specialty representation) and a well-defined scope of authority. In this case, the PAC might be constructed of 6 physicians of differing specialties. (In our turnaround situation, due to the urgency of time, the PAC was entirely staffed by internal medicine physicians and the size of the system and specialty medical staff rendered that sound, at least in the emergent near-term).

The PAC receives input and provides feedback to the employed physicians. And, if this is a clinically integrated model (CIM) with outside community physicians involved, they may be included to provide a consultative input role that offers thoughts apropos of care and quality (e.g. population health initiatives, etc.). The PAC then provides input to some sort of nimble (e.g. “small” in size) Executive Committee which may include representation from the PAC, the CEO, COO, CMO, CTO, etc., to work on and resolve the issues.

In a larger health/hospital system, the PAC might have an expanded multi-specialty representation and may be larger in membership/construct. The system may have one physician representing each specialty who serves as a conduit for his or her specialty constituency. For instance, a system might have a cardiologist who is the lead for the other cardiologists to ensure that their specialty-specific needs are addressed. The cardiology lead might then serve on the PAC or report up the concerns of the “cardiology section.” These issues would then be addressed by the PAC. (Remember, this construct does not limit or hinder provider access to the administrative offices and/or the CEO. It simply provides a structured method to obtain and deploy input from clinicians.)

Ideally, representation as either the “section lead” or on the PAC should be voted on by peers. This engenders greater support and commitment from other physicians. That said, the “section lead” should be a leader, not an antagonist. A representative with an axe to grind for some 10-year-old grievance (real or imagined) does no service to the organization and is counterproductive. Only honest brokers out for the betterment of the organization and their constituents need apply.

This model is scalable based on the number of constituencies. As with the small group model, a well-defined scope of authority should be deployed. In this case, the PAC might be constructed of physicians of differing specialties due to the diversity of specialization/sub-specialization within the system. The PAC receives input and provides feedback to the employed physicians. And, as with the small system model, if this is a clinically integrated model (CIM) with outside community physicians involved, they may be included to provide a consultative input role that offers thoughts on care, quality, and continuity of care (e.g. population health initiatives, etc.) throughout the community.

Will creation of a PAC cure all of a health system’s financial and operational woes? Certainly not. But your valued partners can go a long way to flattening the curve and remedying structural deficiencies.

* To read more about Stout’s experience and how we provided a 15 to 1 return on a client’s initial investment by helping them improve on their revenuecycle, download our case study now.

Physician compensation arrangements have changed under constant and fluctuating pressure from the dynamism of the healthcare landscape.

Physician compensation arrangements have evolved during the last two-plus decades. Not only have they changed, but they’ve done so under constant and fluctuating pressure brought on by the dynamism of the healthcare landscape.

In the 1990s, as hospitals gobbled up physician practices with an eye toward managed care, the hospitals generally offered robust salary guarantees. As might be expected, broadly speaking, the health systems began bleeding money from their employed ventures. Health system employment transitioned many of the headaches of private practice management from the physicians to the hospitals and, in many cases, offered providers rich deals with limited downside. (Of course, trading day-to-day management of a practice for employment is a give/get proposition.)

Where once physicians managed their practices to ensure “below the line” profitability (which ostensibly passed through to the shareholders), employment models mitigated the need for physicians to run their practices in a cost-effective manner. Concurrently, these employment models removed worries about things, such as HIPAA, information technology (IT), staffing, medical malpractice costs, rent expense, and revenue cycle (RC) management. Those management headaches were transferred to the hospitals. In many cases, provider production was static or declined theoretically because the physicians were guaranteed incomes regardless of cost drivers.

In the examples below we take a high-level look at compensation shifts for the last two decades.

Figure 1.

1990s Physician Compensation

First, the caveat to this article is that it is, by design, overly simplistic (but directionally accurate). It is built to use bite-sized graphics to display mathematical machinations and convey those to the reader. Actual compensation plan design is complicated with many moving parts.

Preamble aside, as evidenced in Figure 1, let’s assume that Dr. X’s private practice generated $250,000 in revenue (cash accounting). Expenses for the same period were $100,000. That left $150,000 in gross revenue. In the private practice setting, money not spent running the practice drops to the bottom line and the shareholders. In this case, Dr. X, as noted in the Private Practice column above, had gross revenues of $150,000, so he paid himself a salary of $150,000. (If he had shaved $50,000 in expenses, he otherwise may have paid himself an additional $50,000 or a salary of $200,000.)

Now let's say that Dr. X has grown disenchanted with day-to-day management of running a medical practice. He simply wants to practice medicine. Fast forward to when Dr. X becomes employed by Hospital Y. We’ll suggest that Dr. X is an internal medicine provider and Hospital Y is growing its internal medicine base. The hospital guarantees that Dr. X will make $300,000 per year. However, as indicated under the Employment column in Figure 1, Dr. X generates no more revenue and his expenses are static. Removing his guaranteed compensation leaves the system $150,000 in the red for Dr. X (otherwise known as “subsidizing” the physician).

After rivers of red ink, in the late '90s, many systems divested medical clinics, creating a period of detente. However, in the 2000s, the acquisition game began anew. Medicare’s reimbursement cuts to many specialties on in-office procedures (such as imaging) essentially flipped the economics of the medical practices. For those practices that were greatly impacted (with high Medicare populations) and that may have been poorly managed (e.g. inflated expenses), the loss of revenue shrinking the delta of profitability drove many providers to the relative protection of the health systems.

2000s and the wRVU model

In the 2000s, systems that acquired physicians took a decidedly different tack toward the compensation conundrum. In lieu of a big guarantee, health systems began to reward physicians for the work performed. While not perfect, the work relative value unit (wRVU) compensation models provided a means of objectively rewarding providers for “working.” That simply translated into more work, more pay; less work, less pay. This offered systems some downside protection for reduced physician productivity. (Concomitant with the wRVU productivity model are inherent downsides.)

Physician plans began compensating, either in whole or part, based on the individual provider’s productivity to stimulate providers with financial upside, should they hit productivity goals. It should be noted that these models generally do not account for revenues collected per wRVU, purely the production side. For instance, in Figure 2, if we pay Dr. X $25/wRVU and we only collect $20/wRVU, we are decidedly underwater from the get-go exclusive of our cost structure within the health system. It is incumbent on the system to tactically manage its revenue cycle to ensure maximum collections of money due the system.

Figure 3

2000s Physician Compensation

In Figure 3, Dr. X is generating $750,000. The cost to run his practice is $250,000. (Exclude accrual accounting from the equation – for example’s sake, this is collected money.) Dr. X is guaranteed a small base ($75,000) and is paid $25/wRVU. Generating 10,000 wRVUs, Dr. X has added another $250,000 to his compensation for total physician compensation of $325,000. Reducing the gross revenue by the provider compensation leaves a profit of $175,000 (most systems “subsidize” employed providers).

Many of these models, in some form or another, exist today, holdovers that are fairly easy to understand and implement. Some private practices have even deployed these models in an attempt to motivate providers and enable them to choose their workload while clearly understanding how that might impact them.

Enter the Value Era

Many health systems and hospitals are contemplating changing their compensation structures, disrupting current paradigms regarding physician pay by embedding components addressing rules from Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and its associated component pieces of the new Merit Based Incentive Payments System (MIPS) and alternative payment models (APMs) into compensation plan design.

Systems with employed physicians who are not knee-deep in MIPS or APMs begin with one foot in hole. However, forward-thinking systems are beginning to evaluate how to incent physicians, marrying behavior with quality and efficiency as well as production.

As “pay for value” continues to evolve, compensation models must necessarily change to consider the value of care delivery. This creates a fine balance of quality care delivery while understanding that patient volume loads (and compensating for the same) may not soon recede. As these compensation plans evolve, systems must make sure that plans pass fair market value (FMV) review to ensure that the system is not overpaying the provider, which may draw the ire of the federal government.

We stipulate that this is not a cut-and-dried situation. This is a hypothetical example delineating the modus of compensation plan design, in broad strokes. Of course, systems will continue to reward for volume but also place a measurable value on quality and efficiency, driving the compensation to realize the value care models. That is, physicians will receive a component piece of their compensation based on care delivery, as evidenced in Figure 4.

Figure 4

Physician Compensation Incentive Package

As noted, this exercise isn’t intended to indicate how the system is making less money in Figure 4 than Figure 2 (as the data are fictive). It is simply a graphic to offer an examination of how physician compensation is being contemplated and evolving.

Using our Dr. X example, Hospital Y is deep into MIPS and has determined that its efforts require physician input into quality improvement. In Figure 4, Dr. X retains his nominal base pay and his wRVU production compensation that he had established in Figure 2. Additionally, the system crafted an “efficiency goal” defined as aiding in the reduction of 5% of controllable costs, which would add $25,000 to Dr. X’s compensation if he meets all of the requirements. The system also created a “quality” component of four disease states (ostensibly all valued at $10,000 each) for another $40,000 in potential compensation. These pieces must be measurable and “valued” and cannot be subjective in nature. As an aside, we advocate for a strong physician advisory committee (PAC). A PAC can advise and consent on the development of compensation programs and can assist the health system in determining clinical aspects of care delivery that can be managed and measured to improve quality and value outcomes.

Combining Dr. X’s incentives, we see that he generated $315,000 in incentives to tie in to his base of $75,000. Presuming that his gross revenue (the system is collecting $75/wRVU) is $750,000, removing expenses and MD compensation, the system realizes a $110,000 profit on Dr. X. (Again, as noted in the “2000s” example, most systems subsidize their physician practices/clinics.) The key, too, is ensuring that the “at risk” money (e.g. incentives) is priced at FMV rates and is robust enough to positively impact the physician’s behavior (e.g. production, an eye toward quality and efficiency, etc.)

Realizing the established efficiency and quality goals divined by the health system (with physician executive input) assists the system in moving forward with its goals to meet (or exceed) MIPS goals. The system correlates its efficiency and quality components by specialty to align with MIPS, ensuring that it receives the increased reimbursements two years hence (e.g. 2017 data impacts reimbursements for 2019, 2018 data impacts reimbursements for 2020, and so on).

As evidenced in Figure 5, most of Dr. X’s compensation is currently driven by his production. But that may shift as care value is measured, monitored, reported, and reimbursements are more closely aligned with quality of care. The crux of evolving compensation models revolves around the idea that compensation and quality will be woven into a tight tapestry where, at some point, there may exist a shift of a greater level of compensation from production to quality.

Figure 5

Compensation Percentage Allocation

Compensation plans must be carefully built with diligence then tested for FMV considerations. The models within a health system should be as consistent as possible so that there is little variation among system employees. This also renders compensation plans easier to manage.

As with most things in healthcare, there is no one right answer. Even in provider compensation, some things are local.

* To read more about Stout’s experience and how we provided a 15 to 1 return on a client’s initial investment by helping them improve on their revenuecycle, download our case study now.

I was recently speaking with a hospital CEO about his views on marketing, and he said “You know, there are two types of marketers – those that spend money and those that make money. I prefer the latter.” Good point, of course. We should all fall into the “maker” category. How can you make sure you do?

Four ways to avoid being categorized as a “spender”:

Make data-driven decisions. There’s no better way to position yourself as a maker than using data to determine where and how to best utilize your marketing resources. Data can make the difference between doing what the “loudest voice in the room” blindly dictates and truly pinpointing the way you as a marketer can bring in volume and the best payer mix. Also, use data to set attainable goals—how much volume is realistic to anticipate, and in what timeframe? If stealing market share is necessary, where will it come from and how much? Which leads to my next point.

Track everything against goal. Once you’ve used data to identify your best course of action and set goals for your marketing effort, track everything. Everything. In addition to volume and market share (which can take a good bit of time to actually gather), key performance indicators (KPIs) can quickly tell you how well your conversion funnel is performing. Calls, clicks, form fills, online appointments, and other KPIs are absolutely essential to watch closely during the course of your campaign. This also allows you to adjust as needed if the funnel is not converting as well as anticipated.

Use a CRM platform. If you’re one of the last marketing leaders out there without a CRM platform, get one. Now. I’m not recommending one over the others; there are several really good CRMs out there. It all comes down to the quality of your account team, in my experience, so demand the best. It can really make a difference in how well you and your team use the technology behind CRM to create vey effective, very efficient campaigns. And, you can show your results from a data-driven perspective. Which again leads to my next point.

Report your results. How will others know you’re a maker—not a spender—if you don’t share your results? The key is to make your reporting format as easy to understand as possible. Infographics are always king, but also have the hard data available for those who prefer it. And do this on a regular basis. Share it more frequently with senior leaders and don’t forget to let other levels of the organization know how well their marketing dollars are working for them. Because you’re a maker.

I hope these tips are helpful to you in either affirming what you’re already doing or giving you some things to consider working into your marketing program. It can be easy for marketing to be left out of C-suite discussions, and it’s so critical that we’re there so we can provide our best service to the organization. Spenders don’t get a seat at the table. Makers do.

Everyone knows that the foundation of a good healthcare marketing plan is a focus on where an organization is trying to maintain and grow market share, and where the opportunities lie for expanding reach and volume. And, hopefully, it is based on a solid strategic plan with immediate and long-term goals. But often, there are a number of key sections that are left out—overlooked elements that can move a good marketing plan to excellence, taking advantage of all the layers of outreach in a healthcare marketer’s virtual toolkit. I offer six to consider below.

Six Sections Often Left Out of a Healthcare Marketing Plan

Internal Communications. First off, internal audiences can help reinforce your key messages and themes. But only if you take the time to engage them. Employees, physicians, and volunteers want to “get it” and be included. Include a section that focuses on doing just that.

Media Relations. Why not strategically incorporate earned media into your plan to help reinforce your key themes in an instantly credible way? Take control of your media outreach so that it supports what you’re working to achieve through paid channels.

Community Outreach and Sponsorships. Your organization probably does a lot to give back to the community and support important local initiatives. Some of this can be incorporated into your plan to support service line and program messaging. Think about how to promote your outreach while promoting your key marketing goals, without being too self-serving. It can be very powerful.

Payer Strategy. Healthcare marketers don’t often think about payers, but we should. As the major conduit for reimbursement, you want payers to know your organization has a positive reputation and strong consumer demand. This can be leveraged during contract negotiations. Consider how to target payers with your messaging in ways that are relevant and memorable.

Niche Targeting. Depending on your market, you may have the opportunity to message to a number of cultural niche audiences—Hispanic, African American, Asian, etc. Where appropriate, in-language marketing can be very favorably received. Experiential marketing can be incorporated to engage these audiences in ways that are meaningful to them, bringing them closer to your brand.

Consumer Engagement. Lastly, think of how you can engage consumers when they aren’t in need of your services. Done well, these efforts can actually build your brand much more effectively than a multi-media service line or image campaign. Think of how you can interact with consumers in ways that support your brand and provide value—outside the typical provider-patient relationship.

Take out your marketing plan and reflect on whether any of these sections are missing, and how you might incorporate them to bring greater value to your organization. As marketers, that’s our responsibility. I’d love to hear from you on how you utilize these ideas, as well as any additional thoughts you might have.

“Gary Skarke is an expert in the area of transformation. His company’s success, for the most part, has been outside of healthcare but has touched healthcare on a small scale. As we all know, healthcare is going through a significant transformation and most of what he will share in the article below aligns well with what is happening in the healthcare industry today."

This is the third article in a series of articles focusing on the many types of transformation his company has helped other organizations navigate successfully and how these same situations are occurring within healthcare today.” – Jim Wiederhold

Process transformation focuses on making major changes to the activities and tasks (the how) by which the organization delivers its products and/or services. A core process (i.e., one that adds value to the customer) might be inquiry to order, order to cash, or product line development. Tools used to transform processes frequently includes business process reengineering, process redesign, Six Sigma, Lean or other quality related tools.

A global software manufacturer reduced the cost to process a customer order from $800 to $125. Sales reps saved an average of two hours a week (7% improvement) contacting customers by phone. The CEO said, “Sales reps tell me the time they used to spend putting together sales forecasts now spend that time on strategies to make that forecast a reality.” Initially, the client was frustrated because they spent several months analyzing the “as is” order process and the team was totally unmotivated. Their over analysis was paralyzing them. They quickly re-energized when they shifted to redesigning the “to be” process.

In healthcare, organizations are compelled to improve their treatments, eliminate non, value-added tasks, reduce wait time and cost, treat more patients -- while improving quality and patient outcomes. Such dramatic improvements can generally only be achieved and sustained with a rigorous and aggressive process improvement effort.

In this time of ever-intensified focus on consumerism in marketing and the comparative lack of it in healthcare, hiring managers sometimes think of recruiting marketing executives outside of the industry to fill healthcare marketing roles. They want to bring learnings in from other industries, like hospitality, financial institutions, and retail – which is a great idea. However, I would suggest hiring an excellent healthcare marketing leader who understands this notion and can reach out to SMEs in other industries for insights and advice, then bring that intel back to the healthcare system and incorporate it strategically.

Why? Because healthcare marketing is different. How? Read on.

Physicians. While the marketing programs for most industries focus on either B2B or B2C, and others a combination of both, healthcare includes those plus a couple more: B2P (P=physicians) and P2P. Physicians are the actual conduit for the work. Without them, hospitals, ERs, surgery centers, and even other physicians can’t survive. While healthcare marketers must focus attention on consumers and employers, they must also be savvy in understanding how and when to promote physicians (within regulatory guidelines – which are tangled), as well as how and when to market to them for referral purposes. There are a lot of audiences, layers, and regulations.

Payers. While physicians are the conduits for the work, payers are the conduit for reimbursement, in most cases – not the consumer or the employer. This adds another audience to consider from a reputation and consumer demand perspective. And there are different types of payers – governmental and commercial – with different outlooks and expectations, to some degree. So while we’re targeting consumers, employers, and physicians we must keep in mind that one of our goals is to be on the top of the heap in terms of positive reputation and consumer preference – from a payer’s perspective. There’s a lot more than marketing that makes that happen, but marketers need to message around this – very strategically.

Long tail sales cycle. Patience is a virtue, and it’s absolutely essential in healthcare marketing. While retail marketers know immediately if their latest marketing effort is working, healthcare marketers usually don’t. We can watch KPIs like click throughs, calls, form fills and the like, but the actual medical procedure typically takes weeks or even months to occur. This would frustrate marketers who don’t understand the healthcare sales cycle. It’s important to understand this on the front end of a marketing effort so that appropriate expectations can be set, and accurate forecasting can be done.

For those reasons, leaders should focus on finding healthcare marketing experts who understand the importance of looking at other industries for ideas, and also deeply understand the nuances of the industry. It is possible to find a marketer who can bridge the gap, but it is rare. More often it becomes a costly experiment that can set the organization back. And no one wants that! Be smart. There are some very talented healthcare marketing leaders out there who get it.

When I was in college, the church that I attended had a booth every year at the local fair. We made a pastry called an elephant ear. I have seen at fairs funnel cakes which are made by pouring a liquid batter into hot oil and frying it. The elephant ear dough was mixed in a huge mixer. It had eggs in it. The dough was allowed to rise. It was then punched down, weighed out into balls and set on large cookie sheets to rise again. Volunteers sitting at tables would pat the balls into flat disks. These were fried in hot peanut oil and then covered with cinnamon sugar or powdered sugar. In the mid-1980s we sold these for two dollars apiece. They sold like, well, hotcakes. Many people would pay to get in the fair solely to buy elephant ears. There was always a line. If people saw that the line had gotten short, they would run to get in the line. We could sell as many as we could make.

I was in the booth one Saturday morning patting out elephant ears when I noticed Brother “Jones” handling sales. He was a very kind and pleasant man but age was upon him, and he was absolutely overwhelmed with the task. He had before him a line of people who were eager to get elephant ears and behind him stacks of elephant ears growing cold. I spoke to the team leader and asked him if he could arrange for Brother “Jones” and I to exchange positions, of course, handling it in a way that was not hurtful to Brother “Jones’s” feelings. The team leader declined to have us exchange positions but asked me to assist Brother “Jones” with sales.

We began to quickly make sales, and the stacks of unsold elephant ears got much shorter. Soon Brother “Jones” was at one of the tables patting out elephant ears. This was not a terrible place to be. There was always lively and pleasant conversation at the tables, and the task was ideally suited to his capabilities. I now had helping me another brother who was young, like I was, and energetic. We found ourselves waiting for elephant ears to be produced so we could sell them.

A new problem became apparent. The elephant ears were coming out of the vat and were stacking up waiting to have cinnamon sugar or powdered sugar applied. I spoke to the team leader who moved someone to assist with this task. Each time product piled up at a certain point in the process, I would ask the team leader to add or exchange human resources to speed the flow of product through the production chain.

The following day was Sunday. It was announced in church that the elephant ear booth averaged about $11,000 per year in sales, yet the day before we had sold $4000 in elephant ears. The fair would run each year for 11 days. We were not open on Sundays so we would run our booth for nine days each year. This gives us a daily average just over $1200. While Saturdays had more people at the fair than weekdays, demand always exceeded supply even on weekdays. We had tripled our sales that day by simply using our available resources more efficiently.

Several years later while in college, I read The Goal by Eliyahu M. Goldratt and Jeff Cox. This book is a business novel that describes the same process I did in the elephant ear booth but done in an air conditioner manufacturing plant. The protagonist identifies bottlenecks in the production stream by where product in process piles up and then eliminates the bottleneck by moving resources to that step. I highly recommend this book for business leaders.

The ideal value strategy requires no additional investment of resources but uses the current resources more efficiently to deliver quantity and quality, such as: a faster moving line delivering more and hotter elephant ears. We must not be afraid to make small investments when we know that there will be substantial return on investment. Large investments may be necessary and wise, but the larger the investment, the greater we risk, and the higher returns that are necessary to create a value result.